An investigation into the case has been under way since 2013.

Former French president Nicolas Sarkozy has been placed in custody as part of a probe into allegations he received millions of euros in illegal financing from the regime of late Libyan dictator Muammar Gaddafi, a judicial source said.

Former French president Nicolas Sarkozy has been placed in custody as part of a probe into allegations he received millions of euros in illegal financing from the regime of late Libyan dictator Muammar Gaddafi, a judicial source said.

Mr Sarkozy was quizzed by police at the Nanterre police station, west of Paris, a person with direct knowledge of the case told the Associated Press.

An investigation has been under way since 2013 into the case, involving funding for his winning 2007 presidential campaign.

Reporters gather outside the police station where Nicolas Sarkozy is being held in Nanterre, outside Paris (Thibault Camus/AP)

Mr Sarkozy and his former chief of staff have denied wrongdoing in the case.

The case gained traction when French-Lebanese businessman Ziad Takieddine claimed to online investigative site Mediapart that he delivered suitcases from Libya containing five million euros in cash to Mr Sarkozy and his former chief of staff Claude Gueant.

Investigators are examining claims that Gaddafi’s regime secretly gave Mr Sarkozy 50 million euros overall for the 2007 campaign.

Such a sum would be more than double the legal campaign funding limit at the time of 21 million euros.

In addition, the alleged payments would violate French rules against foreign financing and declaring the source of campaign funds.

In the Mediapart interview published in November 2016, Mr Takieddine claimed he was given five million euros in Tripoli by Gaddafi’s intelligence chief on trips in late 2006 and 2007 and that he gave the money in suitcases full of cash to Mr Sarkozy and Mr Gueant on three occasions.

He claimed the handovers took place in the interior ministry, while Mr Sarkozy was interior minister.

Mr Takieddine has for years been embroiled in his own problems with French justice, centred mainly on allegations he provided illegal funds to the campaign of conservative politician Edouard Balladur for his 1995 presidential election campaign – via commissions from the sale of French submarines to Pakistan.

Mr Sarkozy had a complex relationship with Gaddafi.

Soon after becoming the French president, Mr Sarkozy invited the Libyan leader to France for a state visit and welcomed him with high honours.

But Mr Sarkozy then put France in the forefront of Nato-led air strikes against Gaddafi’s troops that helped rebel fighters topple his regime in 2011.